DRFA 2018 - Guideline 4 - Insurance arrangements
Disaster Recovery Funding Arrangements 2018Guideline 4 –
Insurance arrangementsInsurance arrangements
1. States have a responsibility to put in place insurance
arrangements which are cost effective for the state and the
Commonwealth—clause 3.1.5 of the Disaster Recovery Funding
Arrangements 2018 (the arrangements) refer.
2. A state may find it appropriate to adopt a qualitative
benchmark based on a best practice approach, as was established in
the 2012 Natural Disaster Relief and Recovery Arrangements’
insurance review[footnoteRef:1]. This approach reflects the
obligation on states to identify their risk exposures and fully
inform their decisions with respect to financing potential losses.
[1: Commonwealth of Australia, Department of Finance and
Deregulation. Review of Insurance Arrangements of State and
Territory Governments under the Natural Disaster Relief and
Recovery Arrangements Determination 2011. NDRRA Phase 2 Report.
September 2012.]
3. The qualitative benchmark process is illustrated below:
4. A state’s access to adequate capital may be demonstrated by
referencing the state’s policies to access internal funds, such as
deferral of capital expenditure, access to insurance and/or the
state’s ability or willingness to borrow.
Simon Aitchison, A/g Assistant Secretary
Department of Home Affairs
E-mail: [email protected]
Date of issue: 8 June 2018
Date of effect: 1 November 2018
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